is the UK s leading provider of innovative air traffic services and solutions.

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2 is the UK s leading provider of innovative air traffic services and solutions. is the UK s leading air traffic management provider, maintaining the orderly, efficient and, above all, safe passage of aircraft through UK airspace and beyond» Handled 2.1m flights in FY 2010/11 (87% of flights to/from UK & 13% overflights also provides services worldwide» 24 hours a day, 365 days a year Slide 2

3 Our service lines Slide 3

4 Providing services worldwide United Kingdom Fit out of new Manchester Airport control tower United Kingdom New environmental metric and performance scheme to drive down carbon emissions and fuel costs Spain ferronats selected to provide ATS at ten airfields USA Japan Opening of NATS USA subsidiary Airport capacity modelling and analysis to help the design and development of Narita USA Linking of NATS Airport CDM platform to US Next Generation Testbed Hong Kong Airspace re-design and related services for Hong Kong Civil Aviation Authority Qatar Slide 4 Two year airspace design and implementation consultancy project at the New Doha International Airport Oman Airspace re-design for DGMAN Oman South Africa Procedure design for ATNS South Africa around 2010 World Cup India Capacity enhancement study to analyse reducing congestion, enhancing productivity and increasing operational efficiency at Mumbai International Airport Singapore Terminal airspace design and ATC system surveillance trackers' performance projects underway

5 Two control centres - Swanwick & Prestwick SCOTTISH AREA CONTROL CENTRE SHANWICK AREA CONTROL CENTRE LONDON AREA CONTROL CENTRE Slide 5 NATS Unclassified

6 Our people currently has approximately 4550 employees: AIR TRAFFIC CONTROLLERS AIR TRAFFIC SERVICE ASSISTANTS ENGINEERS ADMINISTRATION AND SUPPORT Slide 6

7 Financial summary had an annual turnover of million (FY 2010/11) made an annual profit of million (FY 2010/11) Slide 7

8 NATS structure and ownership Government (49%) Airline Group (42%) BAA (4%) Employees (5%) CAA Licensed by Govt via CAA Operations NATS (En Route) plc En route & Oceanic Services NATS (Services) Ltd Slide 8

9 NATS Supply Chain Management A strategic business Function with Executive Level representation Control annual external expenditure of 240m (Capital and Revenue) 80% of expenditure with 40 suppliers Central SCM Team of authorised buyers across UK CIPS Certification (Policy and Process) achieved April 2007 CIPS Gold Accreditation achieved March 2011 BS11000 Accreditation achieved January2011 (PAS11000 Nov 2009)

10 NATS SCM Fundamental Building Blocks Clear Departmental Sourcing Strategy Stakeholder Management Team Development Supplier Relationship Management

11 Supplier Relationship Management (SRM) Supplier Relationship Management (SRM) in NATS is:- Managing the relationship with Suppliers Improving the performance of Suppliers Managing the Supplier interface with NATS ensuring all NATS stakeholders are regularly updated Coordinating the Supplier interface within SCM

12 Strategic Sourcing Model Exit Strategy Supplier Inputs Toolkit Supplier Strategy Strategic Supplier Management Plan Supplier Performance Assessment Supplier Improvement Plans Executive Review Largely INTERNAL Working within Cross Functional Teams in NATS SUPPLIER RELATIONSHIP MANAGEMENT Largely EXTERNAL Working with Cross Functional Teams + the Supplier

13 Supplier Relationship Management Formal Supplier Relationship Management Programme Supplier Categorisation Partners, Key Suppliers, Suppliers Supplier Strategies for all Partner and Key Suppliers Supplier Performance Management Supplier Development through Continuous Improvement Programmes Supplier Executive Review

14 SRM Supplier Selection Criteria Value the spend per year or per contract for that supplier Time - the anticipated length of the future relationship Competitive nature of the market - the nature and size of the market and potential alternative options for supply Criticality of supply to NATS effect on NATS of supplier problems or constraints Supplier Potential the assessed potential opportunity to improve the supplier s performance - and the willingness of the Supplier to work with NATS in this way.

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16 Who do we work collaboratively with? NATS Supplier Partners Defined as a trusted Key Supplier that NATS wants to build an enhanced association with, beyond conventional supplier/customer lines, pursuing opportunities to work together towards achieving common goals, generating mutual benefits and where typically risks & costs are shared NATS currently has five of these relationships

17 BS11000 Collaborative Business Relationships Developed by with (Partnership Sourcing Limited) it provides a framework for collaborative business relationships, to help companies develop and manage their interactions with other organisations for maximum benefit to all N was one of the first organisations to achieve the standard it addresses processes that need to be incorporated into collaborative relationships to ensure they are effective & optimised

18 Eight Stage Framework 1. Awareness 2. Knowledge 3. Internal Assessment 4. Partner Selection 5. Working Relationships 6. Additional Value Creation 7. Staying Together 8. Exit Strategy

19 Strategic Phase 1. Awareness understand where relationship management fits with business objectives 2. Knowledge establish a platform of knowledge to develop individual opportunities 3. Internal Assessment evaluate how organisation is positioned to collaborate

20 Engagement Phase 4. Partner Selection find right partner relationship to compliment business objectives 5. Working Relationships build joint approach focused on mutual benefits 6. Additional Value Creation develop additional value from relationship

21 Management Phase 7. Staying Together ensure we can measure and maintain maximum benefit 8. Exit Strategy recognise changes, both internal and external and preparing for disengagement

22 Strategic Sourcing Model Exit Strategy Supplier Inputs Toolkit Supplier Strategy Strategic Supplier Management Plan Supplier Performance Assessment Supplier Improvement Plans Executive Review Largely INTERNAL Working within Cross Functional Teams in NATS SUPPLIER RELATIONSHIP MANAGEMENT Largely EXTERNAL Working with Cross Functional Teams+ the Supplier

23 Where we use BS11000 Our Successful Partnerships Construction Engineering, Facilities & Energy Solutions - manage all our NATS Facilities including Operational Power Spain s leading IT Company operating in Defence, Telecoms & Transportation - developing next generation Flight Data Processor for NATS & other major European ANSP s UK s largest Telecommunications Business - Provide all of our Ground Communications, critical to our operations Major US Air Traffic Systems developer & integrator - developed & Support the ATM System at our main Centre at Swanwick Leading UK business process outsourcing & professional services company - all NATS outsourced contractors & Permanent staff recruitment

24 How the Partnerships are Managed Through a Joint Relationship Management Plan covering key areas to manage & develop the collaboration: Strategic Objectives & Key Milestones Senior Stakeholders & Governance Structure Team Working Key People Communication Change Management Joint Critical Action Planning Value Creation Opportunities Knowledge Sharing Plan Performance Monitoring/KPI s Risks (individual & joint) Dispute Resolution Exit Strategy

25 Fundamentals of our Collaborative Relationships Based on confidence, credibility & mutual benefit Joint commitment to success of specified ventures with clear objectives Shared responsibility for achieving goals Delivering value by adopting flexible & innovative approaches by removing traditional barriers Long term stable arrangement based on certainty & continuity Commitment to success at most senior level in both organisations Openness & trust, through sharing information & expertise and joint problem solving May require some degree of exclusivity

26 Effective Collaboration - Expected Benefits Better cost management Improved time, resource & risk management Delivering incremental business value & innovation Knowledge sharing between partners Skills & resource sharing to meet mutually defined objectives Creates an environment that engenders trust, transparency & openness Providing new levels of value creation

27 Effective Collaboration - Expected Benefits Delivers projects faster, safer and better value Creates extraordinary performance that can t be achieved individually Enables partners to help shape solutions & deliver them Opportunity to drive out bureaucracy, inefficiency & waste and deliver joint efficiency improvements Platform for innovation & leading edge thinking challenge and innovate Common goals with no man marking Creates understanding & overlay of each party s governance & assurance processes

28 Any Questions?